Fixing up the 90-day fire-at-will

The National government in New Zealand introduced a 90 day trial period for small employers. Employers with twenty or fewer employees could take new staff on, but dismiss them for any or no reason for the first 90 days. The idea was that small employers would not have to wear the cost of complicated dismissal procedures if by chance the person they had taken on turned out to be a dud. There is a marked similarity to John Howard’s “Work Choices” which removed unfair dismissal laws for companies with fewer than 101 employees. I wonder if the National government in New Zealand cares to recall that “Work Choices” was not well received by the electorate, most of whom are employees rather than employers. Clearly they haven’t made that connection yet, because they think that the legislation has been so successful that they’re going to extend it to all employers. Basically, for the first ninety days, you can be fired at any time. That sure is going to make you feel safe and secure in your job.

National claims to have some research showing the the 90-day trial period has been working well. But the research seems shakey at best, and even if the research is sound, then it still doesn’t show what the government thinks it shows. The National Party cheerleaders think that there are very few bad employers, and most are good chaps who wouldn’t treat employees badly (one, two). Try telling that to Florence Cohen (scroll down). The cheerleaders forget that just as there are only a few bad employers, there are also only a few bad employees. Most people want jobs, they want to get paid, they want to get promoted. Most people are diligent, or at least diligent enough, just as most employers are decent, or at least decent enough.

The question then is who needs to be protected from whom. Should employers be protected from bad-egg employees, or should employees be protected from bad-egg employers? In most cases, where we have to work out who to protect, then we choose the weaker party. And in employment situations, that’s the employee. The employer can remove the employee’s means of earning an income, just like that. There goes your security – your housing, your medical bills, your food on the table. Even more than that, meaningful work is an important part of people’s understanding of themselves. It’s a critical component of the good life, that we aspire to for all citizens, not just the ones with a bit of capital. Employers hold a great deal of power over employees. That’s why for the most part, employment law is framed to protect the rights of both parties, but where a choice has to be made, that choice goes towards protecting employees.

An off-blog correspondent of mine has made some comments along these lines.*

It seems to me grossly inconsistent of the current NZ government that on one hand it can demand that teachers of six year olds must report everything to specific criteria, in the face of current successful reporting methodologies – excluding the private-schooled and Maori six year olds (so it’s not universal), and with the threat of board sackings for non-compliance – and that it proposes that an employee will be able to be fired within ninety days with no reason required and no right or legal avenue to pursue even that conversation in redress.

Actually, I see that the consistency is in the power games being played; who, specifically has reinforced no power, and who is being played for a pawn. (From whom is any power being removed?)

It says very little for a government’s regard for the wellbeing of all its citizens, and much for wedge politics.

But I do wonder about the sense of natural justice in employment relationships between adults where the power imbalance is so blatantly attacked.

It seems that National will press ahead with the proposed change, no matter what. If that’s the case, then we need to find some ways of adding in some protections for workers. To be honest, I’m not too concerned about the idea of workers having some trial period. Employment relationships are tricky things, and they can go wrong easily enough. Even so, the employer still holds much more power, all the more so if she or he can remove employment at will. We need to find ways to ensure that the power is not exercised capriciously. And it’s probably worth trying to find a way of doing it without resorting to tribunals and courts: if the point of the legislation is to minimise the costs associated with employing people, then the government is hardly likely to take on board ideas that simply shift employment costs around.

It seems to me that an easy way to do this would be for employers to be required to give employees a written assessment every four weeks as to how well they are doing. Are they doing the job well enough to be sure that their employment will be continued past the 90 day mark? If an employer can’t point to a history of negative reports, then she or he should not be able to fire the employee at the last minute on the 90th day. The beauty of a 4-weekly report is that there would be 3 reports before the 90 days is up, with a few days to spare. If the employer can’t produce the reports, or if they don’t show a history which would justify the dismissal, then the standard dismissal rules would apply (i.e. particular procedures that must be followed, with the process reviewable by tribunals and courts). Writing three reports would not be a big compliance cost for employers, but it would give the employee valuable feedback, and give her or him fair warning if the employer thinks that things are not working out. And frankly, if an employer doesn’t have the capacity to write a quick report every few weeks, for something as important as another person’s livelihood, then perhaps they shouldn’t be running a business at all.

Another advantage of the reports is that they would encourage employers to think about whether the person they have employed is good enough. Not perfect. Just good enough. An unrestrained 90-day trial period could lead to employers tossing one employee aside after another, on the basis that they weren’t god’s gift to cleaning, or floristry, or gift shop retailing, or stacking shelves in the supermarket, or whatever. Don’t bother interviewing people too carefully, don’t bother checking references, certainly don’t bother with any training. Just keep on churning through the workers until you find one who is already perfect, without having to bother with any kind of effort yourself. By being required to document how the employee is doing, the employer must take a bit of time to think about whether the person will do, and could do better with a bit of training. That seems to me to be more equitable than simply picking another worker off the shelf.

Alternatively, rather than going down the 90-day trial route, perhaps the government should spend a bit of time educating employers. It is entirely possible to hire people on a short-term contract. Perhaps the answer is to make more use of short term contracts as a prelude to a permanent job offer. Of course, that might look like too much hard work. Much easier just to stick it to workers.

Just remember. Workers vote too.

* My correspondent prefers not to comment on the blog, but she often responds to posts, and she always says something interesting and thought-provoking. I get a little burst of pleasure when I see her name pop up in my in box. Thank you, gentle reader!

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3 responses to “Fixing up the 90-day fire-at-will

  1. Some good comments. Some employees (and some employers, too!) can take the mickey though.

    I always thought that the best way of mitigating this power is to limit its use to, say, 10% of new hires. It allows employers to get rid of real misfits but makes sure that they think carefully in case the re-hire is worse! It prevents the wholesale removal of employees that a cynical employer could use. And, most importantly, it is simple to track and implement.

  2. Your suggestions sounds good in theory, not sure how easy it would be in practice.

    When people discuss this issue they often overlook the impact on other employees of a staff member who doesn’t work well and/or fit in.

    One bad employee can make life very difficult and unpleasant for the other good ones.

    The time, cost and other demands of recuitment, induction and training, even in unskilled jobs is a very good incentive for employers to get it right when they take someone on and not to fire at will.

  3. It’s harder than you think to write an assessment, and many employers are not HR experts. Many can hardly write a business letter more complicated than a quote. But … perhaps the Employer’s Federation could provide a simple assessment sheet, requiring four ticks per week on a 1-5 scale? That could be a good starting point for a probation tool.